With historically low inventories homes have been selling so quickly and are in such short supply that many sellers who are planning to buy another home after they sell are getting nervous... what if you can't find anything you want to buy?
Becoming homeless when you sold a nice home can be a very real concern. Here are some options to protect yourself against that situation...
- Make the sale of your home contingent upon you finding a home of choice
- Most likely both you and your buyer will want to put a deadline on your search... if you don't find a new home by a certain date the agreement will be cancelled
- While this is good for you as a seller, this often isn't attractive to buyers because they may wait and end up with nothing
- If you have a home that is in demand, buyers are more likely to risk losing it for the potential privilege of buying it
- Set an on or before closing date a few months out
- If you don't find a home you like you still must sell, but more time gives more opportunity to find something you like
- Not all buyers will be able to accommodate such an arrangement and it could cause additional charges for their interest rate lock, could even require new financing depending on timeframe
- Your buyer may ask for contribution to interest rate extension costs
- If your buyer risks losing financing if you don't close by a certain date, you could possibly close on your sale before the closing on your purchase with a rent-back agreement to stay in your home until you close on your new home
- Store your belongings in a POD and move in with friends/family, or get a short-term rental if you don't find a new home before closing on your current home
- Buy first, if you have the financial resources to do so
It seems like there are challenges whenever you sell and buy another home... just different ones depending on the circumstances. This is still a good time to make such a move, when prices are on the rise but still closer to the bottom and interest rates are still near the lowest in history.
